Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Direct materials Direct labor Manufacturing overhead Gross margin Less operating expenses Selling expenses 135,000 117,450 147,750 Variable Sales commissions 40,500 Shipping 3,100 Fixed (advertising, salaries) 180,000 Administrative expenses Variable (billing and other) 2,700 Fixed (salaries and other) 72,000 Net loss $575,000